Zuma's fee free plan may cause chaos at SA's universities

Johannesburg - President
Jacob Zuma’s move to scrap tuition fees for students from poor South
African homes and freeze tariffs for those from working-class households
may cause chaos during registration at public universities this month.

Zuma unveiled the plan on December 16, two days before
Cyril Ramaphosa replaced him as leader of the ruling African National
Congress and two days after a body representing the 26 state-owned
institutions said each would raise fees by 8%. The University of
South Africa, the country’s biggest with more than 400 000 students,
held fees at 2017 rates, it said on December 7.

On January 1, the universities said they won’t allow walk-in
applications from people who qualify for free education, but people
should instead submit details online for assessment. A day later, the
opposition Economic Freedom Fighters party condemned the move and called
on all academically deserving students to report to universities of
their choice for registration.

“Zuma’s announcement on free tertiary education is very much a
political project and it puts a lot of pressure on the new ANC National
Executive Committee,” Joleen Steyn-Kotze, a senior research specialist
at the Human Sciences Research Council, said by phone. “It is possible
that there will be chaos and universities are going to be on high
alert.”

Earlier protests

Weeks of violent protests at universities across the country in 2015
and 2016 delayed the end of those academic years, and institutions’
finances were stretched by the state’s decision to limit tuition costs
in 2016.

Africa’s most-industrialised economy is contending with a
skills shortage and a 28% jobless rate. Investors are concerned
that the fee proposal, which ignores fiscal targets set in the budget,
will add to government debt and hasten another rating downgrade to junk
for the country’s local-currency credit.

Under the plan that will be phased over five years starting in 2018,
students from homes where the combined annual income is R350 000 ($28 400) or less annually won’t have to pay for tuition, books, meals,
accommodation and transport.

The directive also froze fees for students
from households earning R600 000 or less per year.
The National Student Financial Aid Scheme, which provided assistance
to about 226 000 university students whose family income was below
R122 000 annually in 2016, will assess applications from prospective
students who didn’t previously qualify for financial aid but who now
do, Chief Executive Officer Steven Zwane said on Thursday in Pretoria.

NSFAS disbursed R12.4bn in financial aid to almost 482 000
students at universities and technical-vocational colleges in 2016,
according to its annual report. Under the new plan, all those who are
funding their studies through the organisation will have their loans
converted to grants.

Funding allocation

The National Treasury allocated R76.7bn to higher education
for the year through March 2018, and estimates this will increase by an
average of 8.2% in each of the following three years, the
fastest-growing spending item after debt-service costs, it said in the
mid-term budget in October.

South Africa will increase subsidies to universities to 1% of
gross domestic product from 0.7% now over the next five years,
according to Zuma’s December 16 statement. The National Treasury will
outline how the government will fund free higher education “in a
fiscally sustainable manner” in the February 21 budget, Finance Minister
Malusi Gigaba said after the presidency’s announcement.

“We can easily afford it if we cut out the amount of government money
that is currently being wasted on corruption and state capture,”
Azar Jammine, the chief economist at Econometrix, said by phone.

“Under
the current circumstances there is too much pressure on the fiscus to
afford the new measure.”